Boeing Stock Dropped Despite the Firm Winning a $169 Million Contract to Support F/A-18E/F and E/A-18G Fighter Planes.

Boeing Stock NYSE:BA

Boeing Stock (NYSE:BA)

Boeing stock plunged, although the company recently won a contract involving the F/A-18E/F and the E/A-18G fighter planes. The Naval Supply Systems Command Weapon Systems Support granted the honor in Philadelphia, Pennsylvania.

Contract completion is expected in September 2024 at $168.8 million. As part of the agreement, Boeing Company (NYSE:BA) will fix two flight control surfaces on F/A-18E/F and E/A-18G planes.

The bulk of the work for this contract will be completed in Jacksonville, Florida.

Why is Boeing Doing So Well?

Boeing Company (NYSE:BA), a key player in the defense industry, separates itself from its competitors thanks to its diverse portfolio of projects, robust order bookings, and sizable backlog. In addition, they are experts in a broad range of aircraft-related projects, including component repairs and modifications.

Boeing Company’s (NYSE:BA) fixed-wing military aircraft portfolio includes the F/A-18E/F Super Hornet, F-15, P-8, KC-46A Tanker, and T-7A Red Hawk. Boeing stock receives a steady stream of orders from the Pentagon due to its combat-proven aerospace projects and related services and the fast-increasing requirement for military aircraft due to heightened geopolitical concerns globally. The most recent contract victory is illustrative of this. The military industry should expect an increase in revenue due to this increase in orders.

Future Growth

Emerging countries in the Asia-Pacific, the Middle East, and South America are investing heavily in strengthening their military forces in response to growing global security concerns. Meanwhile, industrialized regions of the United States and Europe have long dominated the global military industry. The United States is the world’s leading supplier of weapons; therefore, it naturally spends a lot of money on military hardware. Boeing Company (NYSE:BA), the biggest aircraft manufacturer in the United States, has a stronghold on the military aircraft market.

From 2021 to 2026, the worldwide market for combat aircraft is projected to grow at a CAGR of 2.5%, with North America accounting for the highest regional share of this market, as reported by Mordor Intelligence. This expansion is a direct result of rising global threats and geopolitical instability, leading to higher military budgets.

Boeing stock price fell 39.3 percent last year, far worse than the industry’s 21.1 percent drop.

Featured Image-  Megapixl @ Michaelvi

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About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.